Jump to full article: Miami (FL) Herald, 2009-02-23
Author: PATRICK DANNER
Intro: In the 12 years since the settlement, Dosal has seen its share of the Florida market climb from less than 1 percent to more than 15 percent. It sells four brands: 305's, its most popular; DTC; Romy; and Competidora. Most sell for about $1.40 to $1.80 a pack retail. . . .
''We sell on price. End of story,'' Yolanda R. Nader, Dosal's chief executive and chief financial officer, says matter-of-factly.
Now, Dosal is afraid its business may be snuffed out by Big Tobacco's push to persuade Florida lawmakers to hit Dosal and other small cigarette makers with the same 50-cents-a-pack settlement fee.
If Dosal has to raise prices to cover the fee, it says, it will lose its cost advantage. Dosal says smokers will defect to other brands, including discount cigarettes made by Liggett Group, a unit of Miami's Vector Group, which reached its own settlement with Florida. Liggett doesn't charge the 50-cents-a-pack fee. . . .
Eliminating the price disparity between discount cigarettes and other brands means that smokers can't simply switch brands to avoid the increased cost, notes Eric Lindblom, director for policy research with the Campaign for Tobacco-Free Kids.
''By closing the gap, there's nowhere for that smoker to go but to quit or cut back, and that's what we want smokers to do,'' Lindblom says.
Requiring the fee also would eliminate the need for the state to increase the excise tax on cigarettes by $1 a pack, Sutton says. Florida legislators are considering raising the tax to raise about $1 billion a year. Florida's excise tax is 33.9 cents, the fifth-lowest in the country.
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